The second part should look like this:

Ratio 2013 2012

Short-Term Liquidity

Current ratio

Current Assets

Current liabilities

Current Ratio = Quick ratio (acid test)

Current Assets

(Inventory)

Acid Test =

Recievables turnover

Credit sales

Accounts recievable

Inventroy turnover

Cost of sales

Inventory

Payables turnover

Cost of sales

Accounts payable

Long-Term Solvency Interest coverage

EBIT

Interest on long-term debt

Debt to capital

Long-term debt

32,856 24,088 Long-term debt + equity

Profitability on Sales Gross profit ratio

Gross profit

Sales

Operating expense ratio

Operating expenses

Sales

SG&A expense ratio

SG&A expenses

Sales

EBIT ratio

EBIT

Sales

Pretax income ratio

Pretax income

Sales

Net income ratio

Net income

Profitability on Investment Return on total assets

Before tax

EBIT

Total assets

After Tax

EBIT x (1 -Tax rate)

Total assets

Return on equity

Net income common

Common equity Need answered today Feb 25, 2016

Course Code: MBA5130-8 Course Start Date: 02/01/2016 Section: Section 3: Management of Business Finances Week: 4 Activity: Evaluate the Current Financial Condition of IBM, Inc. Activity Due Date: 02/28/2016 Activity Description An annual report is a comprehensive statement describing a company's activities throughout the preceding year. Annual reports are intended to give shareholders and other interested stakeholders information about the company's activities and financial performance. All public corporations must provide shareholders with a financial report every year so that shareholders understand and are able to assess overall performance. The front part of the report often contains an impressive combination of graphics, photos and an accompanying narrative, all of which chronicle the company's activities over the past year. The back part of the report contains detailed financial and operational information. In this assignment, you will read and assess the financial performance of IBM, Inc. over the past couple of years. Begin by downloading the 2013 IBM annual report from the IBM website: http://www.ibm.com/annualreport/2013/bin/assets/2013_ibm_annual.pdf Read pages 1 - 28 and then find the financial data (i.e., income statements, balance sheets and statements of cash flows) on pages 78 - 81. Using the IBM income statement data on page 78 in the annual report, create a common size income statement (similar to the table on page 27 in Grossman & Livingstone, 2009) by filling in the following format: Then, using the income statement data and the balance sheet data on page 80 in the IBM annual report, create a table of ratios like the table on page 31 in Grossman & Livingstone, 2009 (include all of the ratios defined in the page 31 table for both 2013 and 2012. To create the required common size income statements for IBM, see the following links: http://www.netmba.com/finance/statements/common-size/ http://www.investinganswers.com/financial-dictionary/financial-statement-analysis/common-size-income-statement-5237 Use total revenue for sales to construct these values. Your book provides guidance on how to compute and interpret financial ratios. However, if you find the book difficult to follow, there are many websites that discuss how to compute, report and interpret financial ratios for a company. Write a four part analysis of IBM. In the first section of your paper, summarize what you learned and/or found particularly interesting about IBM in your reading of the first 28 pages of the annual report. Then insert the tables you created (either cut and paste from Excel or create tables in Word) in section two. In section three, evaluate IBM by discussing the numbers in your common size income statement and balance sheet ratios. Look for trends that identify areas of strength, stability or possible concern. Finally, find two scholarly reports that discuss IBM's financial performance during this period and discuss how those professional reports correlate with what you found in your analysis. Length: 4-5 pages not including title page and references Your response should demonstrate thoughtful consideration of the ideas and concepts presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards. Upload your assignment using the Upload Assignment button below. Learning Outcomes 1.0 Articulate the goal of financial management. 2.0 Assess the role and purpose of financial markets. 3.0 Use supply and demand curves for microeconomic and macroeconomic analysis. 4.0 Evaluate income statement, balance sheet and statement of cash flow data. Resources Books Reference Grossman, T., & Livingstone, J. L. (2009) The Portable MBA in Finance and Accounting. Hoboken: John Wiley & Sons, Inc. ISBN: 9780470481301. Articles Reference Laux, J. (2010). Topics in finance part II: Financial analysis. http://search.proquest.com.proxy1.ncu.edu/docview/195911761? accountid=28180 Romic, L. (2011, September). http://proxy1.ncu.edu/login? url=http://search.ebscohost.com/login.aspx? direct=true&db=bth&AN=65535146&site=eds-live Instruction Read Chapters 1, 2 and 3 Instruction Read Article Read Article Websites Reference Instruction Accounting and Financial Statements (2013). https://www.khanacademy.org/economics-finance-domain/coreWatch Video finance/accounting-and-financial-stateme Financial Reporting for Business (2008). http://proxy1.ncu.edu/login? Watch Video url=http://digital.films.com/PortalPlaylists.aspx?aid=6281&xtid=40229